Grower Quotas

Folks studying marijuana legalization are thinking that letting all growers grow all they want might lead to overproduction. So growers might get quotas. But who would decide what quotas growers get, and how? “On the merits,” on the basis of perceived strength of application? (Watch out for cronyism.) Lottery? History of production? That’s the method used in the 1930s for tobacco.

Folks interested in this problem might read:  Prosperity Road : the New Deal, tobacco, and North Carolina / by Anthony J. BadgerChapel Hill : University of North Carolina Press, 1980.

It deals with price collapse of tobacco in the Depression – how the FDR Administration restricted production.

I’m skimming it (since it’s not about tax), but I think these highlights are accurate:

Allotments and quotas – first nationally, then by states, then by counties.

Elected officials — or county agents at the county level parceling out the right to grow tobacco to individual growers.

Growers agreeing formally to limit production via grower-only referenda.

The failure of the 1938 referendum to agree to limits – never repeated.

 These limitations created huge distortions in the long run. And consternation all along.  But Badger, who is a distinguished British historian, see http://www.cam.ac.uk/research/discussion/an-interview-with-tony-badger-50-years-a-historian, concluded that the New Deal “brought economic prosperity to Eastern North Carolina” and benefited not just large landowners “but also the overwhelming majority of tobacco growers.”  Page 235.

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Author: patoglesby

From 1982 to 1990, I worked in tax policy for Committees of the United States Congress. In recent years, I was Adjunct Lecturer at UNC-Chapel Hill's Business School and then Adjunct Professor at its Law School.

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